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Dumb or Dumber Prize Competitions

If you need evidence that prosecuting authorities consider that the general public in the UK is intellectually challenged, then consider the application of the skill and judgment test in the law governing prize competitions. This test is currently in the Gambling Act 2005 (s.14(5)), but existed in its predecessor, the Lotteries and Amusements Act 1976 (s.14(1)(b)).

The law on prize competitions is that persons operating a prize competition are not regulated by the Gambling Commission and do not need an operating licence under the Gambling Act 2005 if the prize competition is not a lottery. To be a lottery, the competition must allocate one or more prizes wholly by chance and participants are required to pay to take part. This covers competitions where there is an indirect payment, such as a charge in addition to the network costs of sending a text message in a competition with entry by mobile phone or entering a competition by phone with a premium rate number.

However, if there is an element in the competition that requires participants to exercise a degree of skill or judgement or display knowledge, then the competition will not be a lottery. The degree of skill, judgement or knowledge required is that which can “reasonably be expected to prevent a significant proportion of persons” from participating or winning a prize.

The Gambling Commission has published revised guidance on prize competitions and free draws. In the guidance it makes clear that only a court can definitively interpret the skill and judgement test. In its guidance, however, the Commission points out that “competitions that ask one simple question, the answer to which is widely and commonly known or is blatantly obvious from the material accompanying the competition” do not in its opinion pass the test. Yet these competitions appear to be everywhere.

So is the proliferation of these one-question competitions evidence that:

the Commission is avoiding using its prosecution powers for some undisclosed internal policy reason (such as to preserve limited resources)?

the Commission is unwilling or unable to use its prosecution powers for a lack of certainty about how a court would interpret the skill and judgment test? or

prize competition organisers have been able to prove to the Commission’s satisfaction that significant proportions of participants are unable to answer simple questions?